In the previous article, I left off with the fact that you will get a ton of collection calls from your credit card bank once you miss a payment. Credit card bill collector calls are just part of the process. You know collection calls are going to occur, so you may as well roll with it. There are technology tools to manage collection calls.
Throughout the debt settlement series, I have highlighted the importance of being in contact with your creditors, even when the bill collector for the bank, or you, are not ready to settle yet. I have recommended for more than a decade now, that you be the one to initiate the calls, rather than pick up one of the many bill collector calls you receive. Your calling the bank, if nothing else, helps your mindset.
NOTE: This post is part of our Debt Settlement Guide. If you’ve missed any of the previous content, or would like to start at the beginning, please see the links at the bottom of this page.
There is a short list of things you want to cover with bank debt collectors, and several things you want to avoid when speaking with them. Let’s hit the DON’T list first.
Don’t Ignore a Creditor Trying to Communicate
Falling off the planet, or being completely unreachable when your creditors are trying to talk to you, can lead a bank to treat your account differently. Early placement with a collection agency, or bundling up your account with others and selling the collection rights off to a debt buyer, are a couple of ways your bank may react when they have nothing else to go on.
Banks change up their recovery policies and goals from time to time – some more frequently than others. Not every credit card lender is going to have a trigger, or way to segregate your file as having potentially better recovery odds (some indication you are more collectible than someone else). Someone who is showing up in their system as being proactive in communicating a financial hardship can often be viewed as less likely to be a complete account loss.
Good communication with your bank will also help you to stay in the loop with any payment reduction plans that your bank may offer that could fit your budget and overall debt reduction plan. Depending on the creditor, you may also get some early and attractive offers to settle your account by staying in touch.
There is a tendency to ignore early stage debt collector calls and leave mail from creditors unopened when you have not been making payments. But that is a behavior more attributed to someone without a plan. If you are serious about resolving your credit card bills, and are reading through all of the debt settlement sections of this site, then you have a plan. A settle-your-debts-as-soon-as-possible-and-move-on-with-your-life plan. You understand how settling debt works. You have access to professional feedback along the way. You can even have a professional step in at anytime, if you want to.
Don’t Pick Up Every Debt Collection Call
Your credit card lenders’ collection calls begin with a customer service tone. If you pick up those early calls, more often they are reminders about missing a payment, or fist level account turnaround efforts from someone with more of a customer service orientation at the bank.
The calls will come with the type of frequency you may not be prepared for initially. The more creditors you have in your plan, the more calls you will receive. You may have spoken with a creditor in the morning only to see calls continue the next day. This is part of the process.
Remember that bill collectors have research and data showing them that they have better recovery rates the more often they call you. The more calls, the more stress you feel, and the more statistically likely it is you will make any payment in order to just stop the calls.
Making payments, even partial ones, that are not part of your plan, can delay your success. There are reasons to make some form of payment, even when you are trying to settle. But that payment would be made for a strategic purpose, not made because of bill collector calls and pressure tactics. Picking up calls from a credit card bill collector is not even necessary. You need to feel as though you are (and in fact should be) in control of the calls when speaking to creditors, but we will get to the do’s in a moment.
In the fall of 2016, we are seeing some significant debt collection rules being proposed that will limit the amount of calls any collector can place. I will update this guide when those changes begin to take effect.
Don’t Share Too Much with a Bill Collector
There is sometimes a tendency to want to share too much with customer service reps who initially call you, and later, the collection and recovery agents from banks. If all you’re saying when you talk to the banks customer service reps, or recovery department collectors, is stuff that makes it tough to be you financially, that is usually fine, but you want to stay away from saying certain things.
A good example would be taking a call in the second month of delinquency and initiating some type of settlement dialogue. You are wasting your time by doing this. The person at the bank you are connected to at 60 days late is not typically authorized to have any type of settlement discussion with you as you are not late enough at this point for many banks to consider settlement as an option to resolve your account. Even if a serious settlement discussion can be had, the offers are often not nearly as good as they will get later when you are closer to charge-off (I cover charge off in an earlier article in this guide, and also here).
Participating in the comments below, or anywhere on this site, will help you get answers to questions and expert feedback about how to deal with any curve balls a debt collector working for your bank might throw at you during your conversations.
Two Important Considerations: Why and When
I sometimes recommend that you speak with your creditor a few times after you’ve fallen behind with payments. Why do I recommend that you make phone calls to a bill collector?
It is important that you feel in control of the calls when speaking to a bill collector. A good way to develop that mindset is by doing the dialing. When you call, you are in control. You have a message to relay and when done, you can politely end the call.
Bill collectors, whether working at the bank or with an outside collection agency, are very good at building up your stress level. They know your level of stress often increases the odds they will get a payment from you. Staying on the phone and answering their questions is ill advised, unless you are at the point where you’re negotiating your settlement.
There are creditors you will be negotiating a settlement with, when the timing is appropriate, who will have a litany of questions for you, and that you will want to answer in order to get a deal locked in place. But that is going to be during one of, if not the last, phone call you have about that debt. I cover this in detail in the next section of this guide.
Talking to Your Banks Internal Collection Dept.
When speaking with creditors (and later with debt collectors), you only want to relay the information that helps you, and avoid giving information that helps them. The details should be limited to what has caused you to fall behind with your payments.
What created the hardship? What hardships remain? This is your story. You are living it. Was there job loss or some other type of income loss? Was there, or is there currently, a health issue with you or a loved one? Did your mortgage payment reset? Was there a pile on of unexpected expenses that caused your budget to derail?
These are the types of things you would describe briefly. What you say in these calls will often become part of your banks file notes about your account with them. The next person you speak to at the same bank can see prior account notes. What you said prior, and what you are saying to them now, should be consistent.
You should keep your script to a minimum. You could simply say, “I’m calling to let you know I have not forgotten about this bill. I am having major difficulty right now because my job has mandated I take 3 unpaid furlough days a month. I am exploring options to supplement my income, and as soon as something comes through, I will be catching up with my payments. I have no available funds other than what I need to cover necessities at this time.”
In this example, you have given all the information that you need to, and none of what you don’t. You established a hardship – your hours have been cut. You established that you want to be able to pay something – but right now you cannot. This will be your litany until the timing to offer the bank a settlement arrives.
Answering a Phone Call From a Bill Collector
Because of how many calls the bill collectors make, and the fact that the calls will come from a manner of random toll free numbers, even numbers from within your area code (this is often spoofing), accidentally picking up a call can happen.
Check out this video where I talk about whether to pick up calls from debt collectors, or what to do or say if you randomly or accidentally pick up a collection call you did not intend to.
Settling debt, from start to finish, should be treated as a business transaction. You’re involved in an effort to save your finances and avoid bankruptcy. Settling your credit card debt represents thousands of dollars in savings. For some, settling your debt is going to mean tens of thousands in savings. You do not show up for a job, where you earn thousands of dollars, unprepared and with a bad attitude. You show up prepared and ready to do business.
If you pick up a phone call from a bill collector and you’re not prepared (making dinner, social setting, kids just got home etc.), be polite and quickly end the call. Here are some examples of what you can say:
- “I cannot talk right now, I have my hands full. I can call you back.”
- “I have a visitor and am not able to talk right now. I can call back tomorrow.”
- “This isn’t a good time for me to talk right now. I will call later this week.”
The point is to be professional, and brief, while ending the call quickly. I should also point out that when you sit down to make your outgoing calls to your original creditors, the same business mindset applies. Be courteous and to the point. Sit down to make the calls when you’re prepared, and there are no distractions going on around you.
There is no hard and fast rule to how often you should communicate with your bank or a debt collector leading up to negotiating a settlement. There are some creditors right now where I recommend never making a proactive call until you are in the position to settle. There are other instances where I suggest making one, or even a few calls.
There are some exceptions to targeting the best settlement outcomes with your creditors between the 150 and 180 day delinquent mark. There are also exceptions to when a credit card issuer sends your past due account out to a collection agency. American Express is a good current example of a bank that sends unpaid credit card accounts out to an external bill collector after only a couple of months of missed payments. Citibank and Chase will sometimes do that too.
The next section of the debt relief program will cover how to negotiate and get the deal with your original credit card bank. I will offer insights into:
- Establishing the amount of money needed for a single lump sum settlement.
- Settling with your bank using their allowable 90 day term payments with confidence.
- Have you prioritized the right credit cards and balance for the earliest settlements?
- How to prepare for a litany of questions that some banks have as a policy before approving a settlement with you.
Continue on with the debt settlement section of the CRN debt relief program – How to call the bank and negotiate your settlement.
If you have questions or concerns about making phone calls to bill collectors, or are concerned about something you should, or should not say, post them in the comments below for feedback. If you would like to talk with me about your situation you can reach me at 800-939-8357, choose option 2, or submit a consult request form.
This Debt Settlement Guide includes:
An Expert Guide to Credit Card Debt Settlement
How and Why Banks Settle Credit Card Debt with You
Types of Accounts to Include in Your Debt Settlement Plan
Why Settling Credit Card Debt is Like a Race
How to Settle Credit Card Debt Quickly
How to Talk to a Debt Collector (you are here)
How to Negotiate Credit Card Debt Successfully Yourself
7 Largest Credit Card Banks and How They Settle Debt
Get Debt Settlement Letters and Agreements from Collectors
Paying Debt Collectors After You Negotiated a Settlement
I would like to share a story and some encouragement for your readers.
Compared to the other 2 creditors, US Bank tried to be aggressive with me at times. In one exchange, the agent was becoming dominant and threatening but then ultimately concluded with “We are going to keep calling and writing you”, to which I could not help but laugh. This is exactly like the old comedy movie “Monty Python and the Holy Grail” that some of your readers may be familiar with, particularly a scene called “The Knights who say Ni”.
HEAD KNIGHT: Ni!
KNIGHTS: Ni! Ni! Ni!
ARTHUR: Who are you?
HEAD KNIGHT: We are the Knights Who Say… Ni!
ARTHUR: No! Not the Knights Who Say Ni!
HEAD KNIGHT: The same!
BEDEVERE: Who are they?
HEAD KNIGHT: We are the keepers of the sacred words: Ni, Pen, and Ni-wom!
ARTHUR: Those who hear them seldom live to tell the tale!
HEAD KNIGHT: The Knights Who Say Ni demand a sacrifice!
ARTHUR: Knights of Ni, we are but simple travellers who seek the enchanter who lives beyond these woods.
HEAD KNIGHT: Ni! Ni! Ni! Ni!
ARTHUR and PARTY: Oh, ow!
HEAD KNIGHT: We shall say ‘nee’ again to you if you do not appease us.
It goes on from there, but it is like “US Bank demands a sacrifice! We shall call you again if you do not appease us!”.
Debt traps are really stressful and hard on the mind and body. I encourage people to keep a level head about what the creditor actually can and can not do. Difficult decisions will need to be made about the practical aspects of your finances. However, do not be distracted by impotent threats.
I will also say that using a voicemail and call screening app on my phone has been incredibly effective at managing the annoying and constant calls.
This process can be hard, but for those customers that want to get their act together, you will come out on the other side in a much better situation and will feel much lighter. The resources needed to do it are in the website. I am pretty far along in handling this in my own. However, for those that need help, don’t be afraid to enlist this company.
I received a letter from patenaude & felix 1 month ago saying they are collecting for their client and that if I don’t send a request for validation in 30 days they will assume the debt is valid. I’ve decided to file for chapter 7 so have not yet communicated with them. I’d really like to avoid them suing me before my bk gets underway. What communication should I have with them in the meantime to keep them from suing?
I would ask your bankruptcy attorney about what they can do to help you in this regard.
Midland bought my debt of nearly $30000 in Nov. 2019.They called today & insisted that I make a payment today! They can not talk about a settlement until sometime down the road & after I make payments. I told them that I just couldn’t pay anything today. She did say something about litigation & they needed t have a representation today!(?). What should I do at this point?
Ok, I clicked on the link & it brought be here. Now, what do I do?
You should click on the get help tab at the top of any page on this site and start a profile so you can schedule a call with me. You have some options to consider when settling with collection agencies, but with Midland on the eve of sending to a legal collectors, the options will start to narrow.
Hi Michael,
Thanks for the response. I did go to the debt help button & I do think that debt settlement is a better route for me but right now, my biggest concern is Midland since it is already in collections. I don’t think that I should make a payment to them if it’s only going to mean that I’m committed to the full balance but they are insisting that I make payments & then down the road a settlement can be discussed. I asked ..if I can find a way to make a payment, then what does that mean for me…I wanted them to tell me the plan but all I got was…well it means that you’ve taken the first step. I have family that will help so should I just throw a number at them? I just do not want to commit or
pay anything unless I know what the options and/or terms are. I have talked to them twice on the phone & I don’t know how to be tough with them or if I should. Any advice? I did not see where to schedule a phone call with you on the debt help page. Is there a way that I can do that?
I think you should let a professional handle Midland. It will pay for itself.
You can schedule a call with me here: https://calendly.com/debtbytes/15min
About 3 years ago I decided to go back to school and I actually ended up having to leave my job because I couldn’t keep up with the school work and the job I had. I fell behind on ALL of my credit cards at the same time. While I am still in school, I am almost done now. All of the credit cards (that I had at $0 balance) were charged off/collection. I decided to start settling to get my credit cleaned up now. What advice can you give me from looking at these accounts? Also, the US Bank card was a secured card which had a $300 or $400 deposit ( I don’t remember). What happens with that initial deposit that I put down after its charged off? So far I have settled the two Portfolio Recovery accounts. Portfolio stated that they will request to have the two accounts deleted. My plan was to begin settling with the smaller balances and work my way up to the bigger ones.
US Bank (secured card): $353 Charge Off
TD/Target: $769 Charge Off
American Express: $1,284 Charge Off
United Consumer Financial $1,448 Charge Off – Just received letter of collection agency that took over this account but its not reporting on my credit report yet. The OC balance just changed to $0 and Charge Off
Capital One $4,133 Charge Off (I received a wage garnishment letter for this about a year ago but I wasn’t making enough money to be garnished and left that job shortly thereafter. I get paid in cash now so there is nothing to garnish)
I just settled:
Portfolio $427
Portfolio $492
How quickly you can raise cash would change what I have to say.
How much can you pull together monthly right now, and when will that increase later, and to what (if you know)?
How much can you pull together on short notice if you had to, such as a friend or family member loaning you the money?
Any tax refund this year?
I have three judgements filed back in 2015 that I would like to clear. 1st is with Discover for $8946. 2nd is from Portfolio Recovery/GE Capital for $3619. The last one is for Midland Funding (Sears) for $1773. I went out of work in 2011 due to disability and it took me 2 years to get Social Security Disability. (I am 61) I am current on my home equity loan ($250 monthly)and one very small credit card. No other credit/loans except I am on the mortgage for a loan for my son to buy his house. He more than covers that. My son is willing to loan me the money to pay these off up to a point.
My questions are:
1) Which one should I try to negotiate first? I was going to start with Discover being it is the highest balance. What might I expect from them?
2) Can you give me any ball park idea on what percentage I might be able to get from the other 2?
I have lots of reading here left but wanted to Thank you for all the information here and on your videos. You are a God send!
If it were me I would want to settle with all 3 around the same time. Settling with one first, and letting that update to your credit reports, or show in the public record, will tip off the other collectors that you are a better target to get to pay (even though it is not your money).
Call in for a consult so I can dig into some additional details, and draw a clear map of how to get where you are going. You can reach me at 800-939-8357 ext 2.
I’ve recently been given a POA for a couple in their late 70’s with over $32,000 in cc debt (Barclaycard, Sears MasterCard and Discover). They live on a fixed income, rent, and their only real asset is a late model car. They literally have no ability to pay and were using the credit cards for basic living expenses. At their age, a decent credit score is of no concern. A son helps them as best he can but he can’t help them pay off this debt. They’ve been making bare minimum payments until recently and the son has taken the cards away so they don’t run up any more charges. What’s the best way to approach the credit cards companies given this scenario?
My first suggestion is to get them in to consult with a chapter 7 bankruptcy attorney. That would provide the quickest, least cost, and most effective solution to put the debt behind them.
If for some reason they cannot do chapter 7, and have assets to protect like a home, it may be a good idea to settle the credit cards for less (say a 40% average), or simply let the debts go and do nothing. Check out this article about the most common solutions to a debt problem.
Although a ch. 7 bankruptcy seems like a decent solution for them at this point, they are too proud to do it. Their son is willing to settle the accounts for 20% of what is owed. Would it be better to offer that to the companies now (they’re not 90 days delinquent yet) or as you said, just let the debts go and do nothing? Wouldn’t that bring on the stress of dealing with collection companies and/or a default judgment?
I am a huge fan of eliminating the stress of the collections process. It takes more of a toll on people than they will admit, or that others can often gauge from the outside. If they have somebody that is going to help with resources to settle that is great. But Citibank, Discover and Barclays are not going to 20%. He is going to want to be prepared with 35%, 40% and 30-ish percent on Barclays.
Thanks for the quick response! Very helpful.
I have a question about checking account debt? I have two accounts with overdraft credit accounts that have been maxed out for several years. One os 1500 the orher is 2500. Both at 25% interest. They have better intrest rates available for a better credit score. They told me what it was then each time i went to apply they raised the score requirements.
Since then my credit took a dump for other reasons. I talked to the bank awhile back and they wont do anything. I have probably paid them several times over by now and dont see catching up with them for another long time. Any suggestions. Are these handeled differently then other accounts?
Thanks
Those can be settled like other accounts, or they can go into collections with the same agencies (or sold off to debt buyers) just like credit cards.
Hello
your website is a blessing on information!
My situation:
I fell behind on my Citibank credit card in Nov 2013. We had all kinds of financial trauma, and I could not keep up with the min payment of almost $500.
I called Citi and tried to start negotiating. After so many calls, I got no where. They were not willing to set my interest to 0%,, or anything else that would ease the payments even temporarily.
When they asked what I could pay, I said “$100”. And that is what I began to pay. I paid every month before the due. During this times, I called in once a month, and wrote letters.
I saw a credit counselor in March of 2014, but after reviewing our budget/bills/etc, she recommended I go back to Citi directly and try to negotiate. This is the ONLY bill we are defaulting on.
The last correspondence I received from Citi is a credit card statement from March 2014, showing that I am overdue.
I stopped calling in July of 2014. The calls were frustrating and unproductive, quite rude (I wish I would have found your guides!).
I sent the last certified letter in December 2014.
With fees and charges, they charged off $26K In October 2015 (though the credit report says I owe $8,636). They did not list the last 4 payments of $100 I made.
I assume the account has been passed on. What do you recommend I do now?
Thank you.
Your next step should be guided by your goals and abilities. I would suggest you call me for a consultation at 800-939-8357, option 2 rings direct to me. I want to know what financing and credit goals you have in the next 2 to 3 years, and how willing/able you will be to fund any settlement that could be negotiated.
Hi Michael,
Your link to one of the comments about your fees did not work. Can you provide an active link?
Thank you.
Check out more details about debt settlement services and coaching.
Michael….thanks for the info you have provided here.
I’m wondering how banks react when you are paying on some accounts but not others. Are credit card banks less willing to settle if they know you are still current on other cards? Will the banks with whom you are current reduce or cancel your credit once they realize you are behind on other cards?
Have you had any experience with CardWorks Servicing. They took over collecting payments for Advanta Bank when they themselves went bankrupt. They seem like they may be more akin to a collection agency and perhaps harder to settle with than a OC.
Thanks
Richard
richard – Banks do often react differently to negotiation efforts, and settlement offers can be impacted, when they see you are paying some credit cards, but not them. Here is an article dedicated to which accounts to include in a debt settlement program. Different banks will handle this in different ways, but that article covers the basics.
Handling Advanta accounts is fairly simple these days whether with CardWorks or another company.
If you would like to drill down into the details of your accounts and what can make sense consider calling in for a consult: 800-939-8357 ext 3
When reading information on another website, it was suggested that we prepare a “hardship letter” and send it to each creditor. Is this a good idea in your view? I was thinking we would call each creditor and ask them where we should send the letter explaining our situation and why we will not be able to pay our entire debt. Is it better to simply verbalize this information?
Thank you! I have read the information and will look forward to the next segment.
Debbie – Using a hardship letter to outline the financial challenges you are facing is useful, but in limited scenarios anymore. 10 and more years ago a written hardship explanation was one of the first things I obtained from a customer. I used them in virtually every situation. Nowadays, at least when negotiating and settling with your credit card lender direct, it is not needed, and issuers like Chase, Bank of America, Citi etc. use systems that don’t actually cope well with receiving them. Settling with extreme hardships (medical, disability etc), and seeking a settlement amount much lower than internal policies allow, would be one of the reasons to send a letter. This type of thing is effective when settling with the small hardship department at American Express, or with small local and regional banks and credit unions. There are also reasons to use documentation with a bill collector you are negotiating with in 2nd and 3rd stage collections – which will be covered in those sections in coming weeks.
In general, it is best to verbalize unless you have debilitating hardships.
Be sure to subscribe to the RSS feed to get updates of the upcoming new sections being published.
Michael Bovee,
I have read your blogs with great interest and I’m impressed with your thoroughness and willingness to help. My main question is this latest one dated May 2013 has no link to the next section which will offer insights into the 4 bullet points listed.
Do I have to wait to June?
Two other questions if I may. I haven’t seen your fee listed. Do you have some guideline that you would share now? My most nagging question is how IRAs effect the negotiation process. Obviously they are safe from creditors but they do effect your ability to pay. Are they even aware of them?
Thank you very much for your response,
Joel
Joel – I will have all of the debt settlement sections dealing with first stage collections (settling with your original lender before charge off) up by the end of this coming week.
How we charge is unique. You can learn more about CRN membership for one on one support here. Here is a brief breakdown:
Free debt relief program: No cost. Review all of the debt relief guides on the site and increase your knowledge and relate all of our content to your own situation through the comments on each page. Get professional feedback and answers in reply. Just learn and participate on the site and you pay nothing.
CRN membership for unlimited one on one support from a CRN specialist in order to settle your debts yourself with a pro at your side.
Full debt negotiation services for those who choose not to take advantage of all that we publish and teach, or the DIY debt settlement support.
Retirement accounts are protected. Your IRA may/may not be part of any debt relief program strategy. Retirement accounts should be left untouched unless a math driven argument can be made for using them. Retirement accounts are generally not visible to creditors, debt collectors or debt buyers, when negotiating settlements. An exception may be where funds are held with the same bank you are negotiating a debt with.
If you are dealing with a specific situation you need help with now, prior to the complete publishing of settling debt with bill collectors sections, go ahead and post a brief outline of what you have going on in a comment reply, or call in for a consult: 800-939-8357 ext 3.
Thank you very much. Your answers were exact, complete and fast, and so far I’m quite impressed by your company.
Though it seems I can utilize your site to get most if not all my questions answered for free your membership for one on one unlimited support is probably perfect for my case.
I look forward to having my phone message returned to go over this membership.
Thanks again,
Joel